EESL brings trigeneration technology to India

The market for trigeneration technology has been estimated at 20,000 MW in India, with the bulk of the demand expected to be driven primarily by commercial real estate, airports, industries and service establishments.
Saurabh Kumar, Managing Director Energy Efficiency Services Limited (EESL)

Recently, EESL acquired UK-based trigeneration major Edina. What are the key drivers for first-of-its-kind venture under the Ministry of Power?
Trigeneration technology can simultaneously provide three forms of output energy: electrical power, heating and cooling. The technology has proven to successfully improve operational efficiencies by up to 75 per cent, reduce energy costs by 30-40 per cent and reduce carbon emissions across markets. In markets like Netherlands and Denmark, gas-based cogeneration already constitutes nearly a fifth of these nations’ total power generation.

In India, this technology has demonstrated significant market potential. The market for trigeneration technology has been estimated at 20,000 MW in India, with the bulk of the demand expected to be driven primarily by commercial real estate, airports, industries and service establishments. While the Indian real estate sector is expected to reach US$ 150 billion by 2020, the associated heating, ventilation, and air conditioning (HVAC) market is expected to witness unprecedented growth with the demand for cooling and chilling equipment driven by rising temperatures, urban migration trends and rapid advancement in green building constructions.

The acquisition of Edina UK Ltd by EESL’s UK subsidiary, EnergyPro Assets Ltd (EPAL), will enable EESL to introduce this globally-proven service offering for trigeneration to India.

The acquisition will also enable us to harness the potential of the UK’s £6 billion (` 53,782 crore) energy efficiency market, while expanding the offering in the energy service contract model for trigeneration and combined heat & power (CHP) technology. The market for CHP-based energy services contracts in the UK, in turn, has been estimated at an annual £200 million (` 1,793 crore).

How strategic is the acquisition for facilitating India’s energy security and sustainable energy?
This acquisition and the subsequent increased adoption of trigeneration and CHP technology in India, will help in reducing end users’ demands on the electricity grid, thereby enabling greater stability in the grid, and help transition to the use of cleaner fuels to power India’s economic growth.

The effectiveness of this technology has already been proven in India. Honda Siel Power Products Ltd’s (HSPP) 1100 kW trigeneration plant established in Greater Noida in 2011 caters to 68 per cent of the plant’s electricity demand, apart from generating about 80 TR cooling load and 1,500 kg of steam every hour. With over 80 per cent capacity utilisation, the plant has been able to reduce overall energy costs by 35-40 per cent while achieving continual power supply and reducing carbon emissions of the plant by nearly 50 per cent.

With electricity prices expected to rise, we expect CHP and trigeneration to become increasingly attractive propositions for end users in India. Indian commercial and industrial users have also advocated for gas supply for cogeneration and trigeneration to be prioritised, indicating interest in embracing responsible energy use to power sustainable growth.

Edina’s superior customer and product maintenance service, as well as exclusive distributor relationship with MWM (part of the Caterpillar product family), have been proven to deliver such benefits in Ireland, UK and Australia, reducing customer energy costs and carbon emissions while also providing continuous and reliable power supply. EESL aims to harness these capabilities and introduce a compelling turnkey solution and servicing model to India, the past absence of which has restrained the wider adoption of trigeneration technology in India.

What role will the acquisition play in India and UK joint commitment for an enhanced ‘Energy for Growth’?

Tell us about current market scenario for trigeneration in India. What are the growth drivers for the technology?
A 2010 GIZ report estimated the market for cogeneration and trigeneration in India’s industrial sector to be 7,500 MW and 5,300 MW for HVAC systems in buildings. The report also identified 100 additional projects identified across 7 major cities in India. EESL is currently conducting its own market assessment study for a more accurate view of the landscape.
Trigeneration technology is ideal for commercial enterprises and industries that require 24-hour simultaneous supply of electricity, heating and cooling. The technology requires continued access to reliable fuel inputs, such as gas or biofuels, to power the generators, along with approximately 10 per cent extra space for installation of the gas generator, depending on the size and intervention potential of the trigeneration project.

Conditions in India have recently evolved to create a more receptive environment for trigeneration adoption. New international supply lines and expansion in domestic commercial production of natural gas will play a vital role in driving the viability of trigeneration projects. With minimal regulatory intervention, the Government of India has even endeavoured to facilitate an enabling environment for the adoption of this technology.

EESL aims to supplement these conditions by offering this technology and affiliated maintenance and services on a 0-capex investment offering to industries and commercial establishments. EESL aims to provide an integrated, turn-key solution in which we assume the upfront capital costs and risk, with the end user availing the benefits of 24×7 power, cooling and heating supply at a cost nominal to prevalent electricity tariffs.

EESL intends to bring CHP technology to India. How does it plan to establish the same within the industry?
We intend to provide metered heating, cooling and power through a 10-15 year cooling, heating and power purchase agreement (CHPPA). Through our proven ESCO model, EESL shall bear the upfront capital costs while providing annual turnkey product installation, servicing and maintenance, recovering costs through savings in end users’ operating expenses.

We are also looking to bring Edina’s bespoke offering that collects site design data, containerises a solution to the client’s specifications, and completes installation within a limited time period to minimize impact on existing operations.

We have already completed energy audits in an industry, hotel and airport, and are conducting audits in several hotels, hospitals, industries and airports across India to identify the feasibility and intervention potential of trigeneration and CHP systems. EESL has already signed MoU with Mahindra and Mahindra Ltd and Tata Motors Ltd for evaluating the trigeneration needs in the companies’ manufacturing plants across the country.

What are EESL’s future plans for meeting escalating energy demands in the country?
EESL is constantly looking to unlock and sustain markets for energy efficiency in India; this market has been estimated at US $12 billion with a potential to reduce energy consumption by up to 20 per cent. We will continue to attempt stimulating markets for solutions that are relevant to the bulk of society, recalibrating the ecosystem to enable adoption of these solutions and driving large-scale social impact.

EESL is already attempting to transform and scale the markets for several energy efficiency solutions – agriculture and municipal pump sets, domestic and street lighting, smart meters, electric mobility, and solar lamps –and drive renewable energy generation. EESL’s approach of aggregating demand ensures that the market attracts industry participation, while passing the benefits of cost reduction – created through bulk procurement – on to energy consumers.